Ready, steady, go: Tesla begins showroom hunt in Delhi and Mumbai

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The launch of Tesla, the most prominent electric vehicle manufacturer, in India has taken a tangible step forward with the company’s representatives exploring locations to set up showrooms in the country’s political and business capital, to push forward to the objective of opening them this year itself, The Hindu has reported.

Tesla executives have already held discussions with several high-profile real estate developers. They are looking at sites on potential high streets and shopping malls.

As the general elections kick off in the country Tesla chief Elon Musk is arriving on a high-profile visit, ostensibly to launch operations in India that includes a meeting with Prime Minister Narendra Modi and an announcement to build an EV factory as well. The trip is scheduled between Sunday (April 21) and Tuesday (April 23). Incidentally, Musk has also sought permission to launch his satellite internet service Starlink in India and his license application is under process.

Launching operations in India is one of the strategic decisions to expand into new markets for Tesla, which suffered a dip in worldwide sales in the first quarter this year which marked an uncomfortable first in nearly four years. Slower growth in China and the US – the company’s two key markets – could have accelerated the entry into India, the report mentioned.

Tesla executives are looking for space between 3,000 to 5,000 square feet (about 280-465 square metres) and a service hub in each city, the report mentioned.

Incidentally, Tesla began production in Germany in March 2022 with Gigafactory Berlin-Brandenburg kicking off production of Model Y. It was earlier reported that vehicles produced in this factory would be exported to India. The entry of Tesla into India is likely to provide the nascent EV market in this country a shot in the arm. In March, New Delhi slashed import taxes on EV to 15% from as high as 100% for auto companies that invest at least $500 million and build a factory. It has been widely reported that Musk will announce an investment of $2-$3 billion in India.

India is the world’s third-largest automobile market and demand for EVs here is expected to rise fast. EVs made up just 2% of India’s total car sales in 2023, but the government’s target is to have EV contributing 30% of all new car sales to by 2030. To remove one of the main roadblocks in the way, the government is also trying to help set up a network of public charging stations in India. While PSU oil marketing companies are being prompted to set up charging stations at petrol pumps, the Centre is also nudging private sector companies to set them up.